Analyze Star Stream's cost$-$volume$-$profit relationships

Star Stream is a subscription$-$based video streaming service. Subscribers pay $$120$ per year for the service. Star Stream licenses and develops content for its subscribers. In addition, Star Stream leases servers to hold this content. These costs are not variable to the number of subscribers, but must be incurred regardless of the subscriber base. In addition, Star Stream compensates telecommunication companies for bandwidth so that Star Stream customers receive fast streaming services. These costs are variable to the number of subscribers. These and other costs are as follows: Enter your answers in whole dollars.

Server lease costs per year

Content costs per year

Fixed operating costs per year

Bandwidth costs per subscriber per year

Variable operating costs per subscriber per year

a$.$ Determine the break$-$even number of subscribers.

subscribers

b$.$ Assume Star Stream planned to increase available programming and thus increase the annual content costs to $$2,600,000,000.$ What impact would this change have on the break$-$even number of subscribers?

Break$-$even number of subscribers will increase $$ to

$$100,000,000$

$2,000,000,000$

$900,000,000$

$15$

$25$

$25$